Active Bond

DEFINITION of 'Active Bond'

A bond or other fixed-income security that is frequently traded on the New York Stock Exchange. Active bond orders are typically filled quickly due to the presence of higher demand from investors and generally have lower bid-ask spreads.

BREAKING DOWN 'Active Bond'

Active bonds are traded by active bond crowds, which are traders that buy and sell bonds that are frequently traded. This is different than bonds infrequently traded, which are traded by the inactive bond crowd. Because of the higher liquidity of active bonds, active bond traders are better able to dictate prices.

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RELATED FAQS
  1. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  2. What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market ... Read Answer >>
  3. How does face value differ from the price of a bond?

    Discover how bonds are traded as investment securities and understand the various terms used in bond trading, including par ... Read Answer >>
  4. What forms of debt security are available for the average investor?

    Discover the various different types of debt securities, issued by government entities or corporations, that are available ... Read Answer >>
  5. Which factors most influence fixed income securities?

    Learn about the main factors that impact the price of fixed income securities, and understand the various types of risk associated ... Read Answer >>
  6. Why is my bond worth less than face value?

    Find out how bonds can be issued or traded for less than their listed face values, and learn what causes bond prices to fluctuate ... Read Answer >>
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